Study On The Crowding-out Effect Of Social Security Expense On Employment

The social insurance is the most important part of social security system.Due to the factors such as historical bill and aging population,the premium rate of social insurance in China has remained at a high level.According to the current social insurance system in China,the individual should pay about 10 percent of premium rate while the enterprise pays more than 30 percent of premium rate.The overall premium rate of China has exceeded that of most countries in the world.Compared with many other countries,those enterprises in China have to pay a relatively high proportion of social insurance premium,thus leading to an enormous pressure on the enterprise cost.When the crowding-out effect of enterprise payment for social insurance on the employment occurs,the high social insurance premium will result in new employment problems.By means of literature review,theoretical analysis and empirical test,this paper has verified the influence of enterprise payment for social insurance on the employment.Based on the theory of economic incidence,this paper has made the theoretical analysis on the economic incidence of social insurance premium as well as the transmission mechanism of the payment for social insurance premium influencing the labor employment.As shown by the analysis,the influence of enterprise payment for social insurance on the employment is subject to various factors,such as the elasticity of demand and supply of labor force,the level of supervision as well as the employees' recognition of social insurance.Different from the previous empirical analysis adopting the macro data,this paper has utilized the micro-sample of those listed companies in the A stock market to determine whether the enterprise payment for social insurance in China can have an crowding-out effect on the labor force.In the previous research,the statutory premium of social insurance for the enterprise in the region was chosen as the proxy variable for the burden of social insurance on the enterprise.But in this paper,the burden rate of social insurance has been used to represent the actual burden of social insurance.According to the analysis result,the employment rate will decrease by 0.192 percent with the burden rate of social insurance increasing by 1 percent.In addition,the sample has gone through the grouping regression based on the ownership attribute of the enterprise.It is found that the payment of state-owned enterprises for social insurance will have a more obvious crowding-out effect on the labor employment compared with private enterprises.After making the theoretical analysis and empirical analysis,this paper has also offered some advice accordingly.It is pointed out that some measures should be taken to reduce the enterprise payment of social insurance premium,such as improving the operating efficiency of social security fund,prolonging the repayment period of historical bills as well as tailoring the differentiated premium rate to the economic status.Further efforts can be also made to reduce the crowding-out effect of social insurance payment on the employment,such as strengthening the public recognition of social insurance.